In matters of surcharge proceedings, the High Court permits restoration of appeal rights despite prior delays, ensuring fair access to justice under procedures outlined in relevant statutes.

JUDGMENT :

Amit Rawal, J.

1. Present intra court appeal is directed against the judgment of the Single Bench allowing the writ petition preferred against the judgment of the District Court dated 30.11.2013 in O.P(L.F)No.109 of 2012, on behalf of the appellant, who was respondent in the writ petition, against the initiation of the surcharge proceedings under Section 16 of the Kerala Local Fund Audit Act, 1994,whereby certain liability amounting to Rs.1,40,749/- was fastened upon the appellant-respondent in the writ petition.

2. Section 16 of the Kerala Local Fund Audit Act is para materia to Section 68 of the Kerala Co-operative Societies Act, which empowers the auditor to surcharge illegal payments and loss caused by negligence or misconduct. Section 68 of the Act provides for a remedy to the aggrieved party to approach the District Court within a period of one month for setting aside of such surcharge or other liabilities referred to in sub Section 3 of Section 68 .

3. In the instant case, the surcharge certificate was issued by the Director of Local Fund Audit on 21.12.2011. Accordingly, the appellant, since deceased represented by Legal Representatives, preferred an appeal before the District Court, Ernakulam vide O.P (LF) No.109 of 2012.

4. Learned District Court, vide judgment dated30.11.2013, held that the surcharge proceedings were beyond the period of limitation as per Section 215 (9) of the Kerala Panchayat Raj Act. It is pertinent to mention here that the appellant-respondent was the Panchayath Secretary. Section 22 of the Kerala Local Fund Audit Act, 1994 provides an overriding effect on other laws in the case of the audit of accounts. For the sake of brevity, Section 16 and 22 of the199 4 Act are extracted herein below:

22. Act to override other enactment.

If any provision contained in any other law for the time being in force relating to the audit of accounts of a local authority or a local fund included in the Schedule is repugnant to the provisions of this Act, the latter shall prevail and the former be void to the extent of such repugnancy.

Section 16 (1) in The Kerala Local Fund Audit Act, 1994

(1) The auditor may disallow any item which appears to him to be contrary to law and surcharge the same against the person making or person or body of persons authorising the making of the illegal payment and may charge against any person responsible therefore, the amount of any deficiency or loss caused by the negligence or misconduct of that person or any sum received which ought to have been, but has not been brought into account by that person and shall, in every such case, certify the amount due from such person.

(2) The auditor shall state in writing the reasons for every disallowance, surcharge or charge, and communicate the same by registered post to the person concerned, along with an extract of the relevant audit objection.

(3) Any person aggrieved by a disallowance, surcharge or charge may, within one month of receiving the auditor’s decision, apply to the District Court. The court may confirm, modify or remit the decision.

(4) All sums certified due must be paid within one month of intimation—unless an appeal is filed under subsection (3). Any unpaid amount, or the sum declared due by the court, is recoverable under the Kerala Revenue Recovery Act, 1968, as if it were an arrear of public revenue due on land.

5. Section 215 of the Kerala Panchayat Raj Act also provides for an extensive remedy paramateria to certain provisions of the Local Fund Audit Act, 1994. The remedy to approach the District Court against the order of the Director of Audit Fund is common in Acts. However, another remedy is provided under Section 215 (13) of the Kerala Panchayat Raj Act, 1994, allowing the aggrieved party to prefer an appeal against the judgment and decree of the District Court to the High Court, which has to be given a nomenclature of MFA as per the High Court Rules and Regulations.

6. The aggrieved party, against the judgme